§ 26-57-208 - Levy of tax -- Rates of tax.
26-57-208. Levy of tax -- Rates of tax.
An excise or privilege tax is levied as follows:
(1) (A) The excise or privilege tax on cigarettes sold in this state is ten dollars and fifty cents ($10.50) per one thousand (1,000) cigarettes sold.
(B) (i) Whenever there are two (2) adjoining cities each with a population of five thousand (5,000) or more separated by a state line, the tax on cigarettes sold in such adjoining Arkansas city shall be at the rate imposed by law on cigarettes sold in the adjoining city outside of Arkansas.
(ii) The tax shall not exceed the tax upon cigarettes imposed by this subchapter.
(C) (i) The tax on cigarettes sold in Arkansas within three hundred feet (300') of a state line or in any Arkansas city that adjoins a state line shall be at the rate imposed by law on cigarettes sold in the adjoining state.
(ii) The tax shall not exceed the tax upon cigarettes imposed by this subchapter.
(D) (i) The tax on cigarettes shall be at the rate imposed by law on cigarettes sold in the adjoining state when the cigarettes are sold in an Arkansas city or incorporated town whose corporate limits adjoin the corporate limits of an Arkansas border city.
(ii) As used in subdivision (1)(D)(i) of this section, "Arkansas border city" means a city that is entitled to the border zone cigarette tax rate and is separated by a navigable river from a city in the other state that is located in a metropolitan statistical area designated by the United States Census Bureau with a population of at least one million (1,000,000).
(iii) The tax shall not exceed the tax upon cigarettes otherwise imposed under Arkansas law.
(E) (i) The reduced border zone tax rates set forth in subdivisions (1)(B)-(D) of this section apply only to sales made at retail by Arkansas border zone retailers to actual consumers of the cigarettes.
(ii) (a) The sale of cigarettes by an Arkansas border zone retailer to any other retailer or wholesaler does not qualify for the reduced border zone tax rate.
(b) The full amount of Arkansas cigarette excise tax will be due on any cigarettes sold in such a manner;
(2) (A) The excise or privilege tax on tobacco products other than cigarettes on the sale by wholesalers to retailers, or by licensed retailers to the Director of the Department of Finance and Administration within the state is sixteen percent (16%) of the manufacturer's selling price.
(B) The tax shall be computed on the actual manufacturer's invoice price before discounts;
(3) (A) (i) The taxes levied by this section shall be reported and paid by wholesalers licensed pursuant to 26-57-214.
(ii) However, retailers shall be liable for reporting and paying these taxes when a retailer purchases tobacco products directly from a manufacturer or from a wholesaler or distributor not licensed pursuant to 26-57-214.
(B) (i) Any taxpayer who fails to report and remit the tobacco tax due on tobacco products purchased from manufacturers, distributors, or wholesalers who are not licensed under 26-57-214 shall be subject to the following penalties:
(a) Five percent (5%) of the total tobacco tax due for the first offense;
(b) Twenty percent (20%) of the total tobacco tax due for the second offense; and
(c) Twenty-five percent (25%) of the total tobacco tax due for the third and any subsequent offenses.
(ii) In addition, the taxpayer's retail cigarette/tobacco permit shall be revoked for a period of ninety (90) days for the third and any subsequent offenses.
(C) The provisions of this subdivision (3) shall not affect the provisions of 26-57-228; and
(4) As provided in 26-57-244, the director shall have the authority to make a direct assessment of excise tax against any person in possession of an untaxed tobacco product or unstamped cigarettes.